Insurers Gird for New Medicare Advantage Fight

Email This Report

Health insurance companies are gearing up for another fight with the Obama administration over payments to Medicare Advantage (MA), the private alternative to traditional Medicare.

The industry is hoping to rack up another win by keeping MA rates stable in February, when the administration is expected to propose new payment levels for the plans.

Lobbyists fear that the administration might reduce those payment rates in an effort to equalize per-capita spending between traditional Medicare and MA, which is known for free perks such as eyeglasses and hearing aids.

Part of that strategy is to solidify relationships with new members of Congress.

After a series of roundtables with sitting lawmakers, the AHIP-affiliated Coalition for Medicare Choices is now focused on courting incoming freshmen members such as Reps.-elect Gwen Graham (D-Fla.), Carlos Curbelo (R-Fla.) and Seth Moulton (D-Mass.).

As many as 15 additional meetings will take place in the new year along with a Washington, D.C. fly-in for MA beneficiaries, the group said.

Insurers hope that lawmakers will use media appearances and letter-writing campaigns to pressure the administration not to pursue cuts.

The coalition has also launched a digital advertising push to bring the issue to the fore as Congress begins its new session.

The task may prove harder than last year, when the administration backed off a proposed cut to Medicare Advantage seven months before the midterm elections.

The move was interpreted by some as an attempt to neutralize an issue that could have hurt Democrats on the campaign trail. Many Democrats had previously criticized the payment disparity between MA and traditional Medicare as a wasteful handout to insurance companies.

Despite the reversal, however, cuts to Medicare Advantage remained a lightning rod in several key races, including Rep. Bill Cassidy’s (R-La.) successful bid to unseat Sen. Mary Landrieu (D-La.).

The debate was reminiscent of the 2012 presidential election campaign, in which Republican Mitt Romney consistently hammered President Obama for the healthcare law’s cuts to Medicare Advantage.

AHIP called the looming payment notice a test for the new Congress.

“Millions of seniors rely on Medicare Advantage, and once again, this coalition of beneficiaries is sending a clear message to Washington: protect seniors who rely on Medicare Advantage and those seniors will stand by you,” said AHIP spokeswoman Clare Krusing.

The group’s effort to protect MA rates has traditionally garnered support from both sides of the aisle. But a reduction could also test AHIP’s strength at a time when the Republican rank-and-file no longer supports all of the group’s priorities.

For more than a year, the increasingly conservative GOP has publicly spurned the industry over a portion of ObamaCare designed to spread risk among carriers entering the new exchanges.

The so-called risk corridors program has been decried by lawmakers including Sen. Marco Rubio (R-Fla.) as an “industry bailout,” and the $1.1-trillion spending bill passed by Congress in December sought to prevent new funds from flowing to it. AHIP chastised Republicans for the move.

In the Medicare Advantage battle, the group is shoring up its support among friendly members of both parties.

Graham and Moulton, along with Reps. Patrick Murphy (D-Fla.), Ami Bera (D-Calif.) and Kyrsten Sinema (D-Ariz.), have all spoken at events organized by the Coalition for Medicare Choices over the last six months. So have Cassidy, House Majority Whip Steve Scalise (R-La.) and Sen.-elect Steve Daines (R-Mont.).

“Medicare Advantage, I believe, is a huge asset to our seniors because it allows that coordinated care that you talked about,” Murphy told a group of seniors in Palm Beach Gardens, Fla., on Aug. 28.

Supporters of the reductions say Medicare Advantage is overpaid and takes resources away from beneficiaries in the main program. But AHIP’s advertising blitz and the increasingly vocal group of Democratic supporters could drown out their voices.

Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, noted last year that enrollment in Medicare Advantage is projected to grow through 2019 in spite of possible cuts.

“Despite insurers’ “doom and gloom” warnings that health reform will devastate the program by scaling back the overpayments, Medicare Advantage continues to thrive. Insurers can still provide additional benefits to attract enrollees by trimming profits and becoming more efficient,” he wrote in April.